President Obama Outlines Net Neutrality Proposal A Connected Nation Policy Brief November 10, 2014 ! Today, President Obama issued a White House statement that outlines, in detail, his position on Net Neutrality. In doing so, the President stepped into a far-reaching debate over the extent to which government should regulate the relationships between Internet service providers (ISPs) like AT&T, Verizon, and Comcast, their residential and business customers, and Internet content and application companies. Today’s announcement is the most detailed statement issued by the President and comes at the start of a week in which Federal Communications Commission (FCC) Chairman Tom Wheeler was scheduled to outline his Net Neutrality proposal to Congressional leaders. The principles of “Net Neutrality” have been debated since the inception of the Internet. Generally speaking, these principles indicate that ISPs should not seek to block, hinder, or prioritize the delivery of Internet content and applications to end-user customers, and should not attempt to discriminate between particular Internet content irms. Because prior FCC attempts to enforce Net Neutrality principles have been overturned by courts, the core of the current Net Neutrality debate is the legal authority of the FCC to reine and enforce these principles. Under one school of thought, the FCC should enforce these principles under its general authority to “encourage the deployment” of “advanced telecommunications capability” using authority given to it in Section 706 of the Telecommunications Act of 1996. A second school of thought calls for reclassifying broadband as a “common carrier” service, using the same provisions that have been used to govern telephone and similar services since 1934. President Obama’s statement released today endorses the latter approach. To date, the FCC has refrained from enforcing these “common carrier” rules (sometimes called “Title II” for the title of the Communications Act of 1934 from which they stem) to broadband Internet access service. The regulatory implications of reclassifying Internet service as proposed by the President are signiicant and go beyond the principles of Net Neutrality. The FCC irst established formal Net Neutrality rules in 2010. Those rules prohibited ISPs from blocking content and applications, prohibited payments for priority service (such as speeding up Netlix video streams in exchange for payment from a content provider), and required full and open disclosure to consumers of service terms and limitations. Those original rules applied only to ixed broadband service and not mobile broadband service. However, in January 2014, the D.C. Circuit Court of Appeals overturned those rules as improperly applying “common carrier” regulation to Internet access service without full Title II classiication. The court, however, did afirm the FCC’s ability to adopt non-common carrier regulations governing relationships between ISPs, their customers, and content and application providers under Section 706 of the Telecommunications Act. In response to that court decision, in May 2014, FCC Chairman Tom Wheeler opened a new rulemaking process. After an unprecedented amount of public comments on the subject, it was expected that Chairman Wheeler would propose new rules for consideration at the FCC’s upcoming December 11, 2014, open meeting. President Obama’s proposal clearly urges the FCC to assert its Title II common carrier authority over “consumer broadband service,” arguing doing so is “a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone – not just one or two companies.” President Obama stated that FCC rules should include the following principles: • “No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially afiliated with an ISP — gets a fair shot at your business.

www.connectednation.org • “No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences. • “Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet. • “No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing ield essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.” The President also urged that the FCC have these rules be “fully applicable to mobile broadband as well,” a signiicant change from the FCC’s 2010 rules that excluded mobile broadband from some key Net Neutrality regulations. The President noted that the FCC has the authority to “forbear” from certain components of Title II regulation (such as tariff ilings) and that in so doing, the FCC can “help ensure new rules are consistent with incentives for further investment in the infrastructure of the Internet.” Industry reaction to the President’s proposal has been swift. AT&T said that if the FCC adopted the President’s proposal, it would “expect” to pursue legal action. National Cable & Telecommunications Association President Michael Powell said he was “stunned” by the President’s announcement, and Comcast called the proposal a “radical reversal” of regulatory policy that “should be taken up by the Congress” and not the FCC. Responding with a statement of his own, FCC Chairman Wheeler called the President’s statement “an important and welcome addition to the record” and indicated that the FCC may delay a possible December vote on these rules, noting that as the FCC deepened its analysis of the issue “the more it has become plain that there is more work to do.” Chairman Wheeler said that the legal authority proposals before it (including presumably the President’s proposal) “raise substantial legal questions” that the agency “would need more time to examine,” noting that “we must take the time to get the job done correctly, once and for all, in order to successfully protect consumers and innovators online.” ! ------! For more information about broadband policy issues, please contact Connected Nation at [email protected].

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